What Happened?
Shares of financial services company Robinhood (NASDAQ:HOOD) fell 10.6% in the morning session after stocks tied to the crypto market fell, mirroring the weakness in digital assets. Bitcoin, the largest cryptocurrency by market cap, dropped to $87,000, a 20% decline from its all-time high of $109,114 on January 20, 2025. Historically, when Bitcoin stumbles, the broader crypto market takes a harder hit, and this time is no exception.
With traders cashing out, cutting losses, or just waiting on the sidelines, this could translate to a slowdown in trading activity on platforms like Robinhood and Coinbase, which could impact their revenues.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Robinhood? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Robinhood’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. But moves this big are rare even for Robinhood and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 5.3% on the news that Wolfe Research analysts downgraded the stock's rating from Buy to Hold, citing valuation concerns. The analysts added, "Since our June upgrade, key drivers underpinning our upside (bull) case have largely played out and are now reflected in the current valuation / share price."
Robinhood is up 16.5% since the beginning of the year, but at $45.95 per share, it is still trading 29.6% below its 52-week high of $65.28 from February 2025. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $1,320.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
